Bug found re: in_category()

I think I’ve found a bug when using in_category()…

I have my main posts displaying on a separate page http://www.designermonkey.co.uk/blog/
I’m having this page not display posts in category 76 using:
if (in_category('76')) continue;
as described in the codex.
I however have many new posts in this category, and with my display settings set to count 9 posts before paging, the first two pages don’t display any posts! The non-displayed posts are still being counted in the loop!

Has anyone else come across this, if so, have they found a workaround?